Correlation Between Snap and VanEck Solana
Can any of the company-specific risk be diversified away by investing in both Snap and VanEck Solana at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Snap and VanEck Solana into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snap Inc and VanEck Solana ETN, you can compare the effects of market volatilities on Snap and VanEck Solana and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Snap with a short position of VanEck Solana. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snap and VanEck Solana.
Diversification Opportunities for Snap and VanEck Solana
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Snap and VanEck is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Snap Inc and VanEck Solana ETN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck Solana ETN and Snap is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Snap Inc are associated (or correlated) with VanEck Solana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck Solana ETN has no effect on the direction of Snap i.e., Snap and VanEck Solana go up and down completely randomly.
Pair Corralation between Snap and VanEck Solana
Given the investment horizon of 90 days Snap is expected to generate 7.87 times less return on investment than VanEck Solana. But when comparing it to its historical volatility, Snap Inc is 1.35 times less risky than VanEck Solana. It trades about 0.03 of its potential returns per unit of risk. VanEck Solana ETN is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 100.00 in VanEck Solana ETN on August 29, 2024 and sell it today you would earn a total of 1,197 from holding VanEck Solana ETN or generate 1197.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.04% |
| Values | Daily Returns |
Snap Inc vs. VanEck Solana ETN
Performance |
| Timeline |
| Snap Inc |
| VanEck Solana ETN |
Snap and VanEck Solana Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snap and VanEck Solana
The main advantage of trading using opposite Snap and VanEck Solana positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snap position performs unexpectedly, VanEck Solana can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in VanEck Solana will offset losses from the drop in VanEck Solana's long position.The idea behind Snap Inc and VanEck Solana ETN pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| VanEck Solana vs. Vanguard SP 500 | VanEck Solana vs. SPDR Dow Jones | VanEck Solana vs. iShares Core MSCI | VanEck Solana vs. iShares SP 500 |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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